The recent case of Faithorn Farrell Timms LLP v Bailey gives some guidance on the extent to which “protected conversations” are protected.
Employers (and employees) frequently want to initiate discussions about the termination of employment. If settlement proves to be impossible the parties often prefer to keep those discussions out of any subsequent Employment Tribunal proceedings. The logic is that it could undermine the strength of your case to admit that there were settlement discussions before termination.
Genuine settlement discussions have been protected for a long time by the “without prejudice” privilege rule under common law principles. For the rule to apply there must be a genuine dispute and the privilege cannot have been waived. Parties can waive privilege by consent or through their improper conduct.
From 29 July 2013 employers and employees gained additional protection with the introduction of statutory “protected conversations” (s.111A of the Employment Rights Act 1996). A Protected Conversation allows the parties to have discussions even where there is no existing dispute between them. These conversations cannot then be used as evidence in an unfair dismissal claim. To that extent the employer is “protected” and the conversation would only be admitted in evidence if the employer has behaved improperly during these discussions.
In the Faithorn case Mrs Bailey worked as a secretary for a firm of surveyors. She had worked part-time but, towards the end of 2014, informed her employer that she would need to increase her hours to full time. When her employer said that they could not accommodate her request there followed discussions between them around her leaving as part of a settlement. Various pieces of
correspondence between the parties were marked “without prejudice”. No settlement was reached and Mrs Bailey resigned and issued Employment Tribunal proceedings in May 2015 claiming unfair dismissal and sex discrimination.
Prior to the full hearing Faithorn argued that some of the correspondence between the parties was not admissible before the Tribunal because it was protected and without prejudice.
The Tribunal concluded that neither the without prejudice rule nor the protected conversation provisions wholly prevented the evidence being admitted. They noted that protected conversations could not be disclosed in unfair dismissal claims but this claim
included sex discrimination. They also found that the protected conversation provisions did not prevent the parties giving evidence that the discussions had taken place but did prevent the contents of the discussions being admitted.
Both parties appealed to the Employment Appeal Tribunal (EAT).
Judge Eady, in probably the first appellate decision on the new provisions, laid down some useful guidance on how far the protection under s.111A extends.
Firstly, the protection extends to the fact that discussions took place, not just their content. Helpfully for employers this protection also extends to internal discussions (e.g. between managers and HR advisors).
Where an employee pursues claims in additional to unfair dismissal (e.g. sex discrimination) the conversations would be admissible in support of those other claims.
Interestingly Judge Eady also found that parties could not waive the protection offered by s.111A. If the protection applies in the first place it stays in place whatever the intentions of the parties.
The EAT remitted the case back to the ET to determine the substance of the case.
This case illustrates that protected conversations are not as simple as they might appear. There are complicated issues around admissibility of evidence particularly where the employee is pursuing claims in addition to unfair dismissal.
Employers should be aware of the risk that their without prejudice/protected conversations could be relied upon as evidence at a later stage. Very often this is a risk worth taking if you have reached the end of the road with an employee but it does need to be assessed carefully before the discussions start.
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